Understanding Bounded Rationality and Satisficing
Have you ever been in a complex situation where you don’t have the luxury of time to make a well thought out rational choice about a decision? And, in those tight situations, have you ever made a satisfactory decision that will suffice in the moment? If you have, you most likely were using “bounded rationality and satisficing”to make decisions.
Bounded rationality is the term given to decision-making that attempts to make sense of the world by the way a person takes in information and processes it to create preferences and choices.
The term “bounded rationality,” is thought to have been coined by Herbert A. Simon in 1947. In his book, “Models of Man, Social and Rational- Mathematical Essays on Rational Human Behavior in a Social Setting,” Simon points out that most people are only partly rational, and are irrational in the remaining part of their actions, or people are rational, but only within limits. In other words, our rationality is bounded by the heuristics and biases we use to make sense of the world.
What Are Heuristics and Biases?
Heuristics are cognitive rules of thumb or hardwired mental shortcuts that everyone uses every day in routine decision-making and judgment and a cognitive bias is any inclination toward a particular belief or perspective — most often one that is ill-supported by reason or evidence.
Bounded rationality thinking is limited by the available information, the tractability of the decision problem, the cognitive limitations of our minds, and the time available to make the decision. This type of thinking is called “satisficing,” or doing the best you can with what you have.
Gerd Gigerenzer helps explain Bounded Rationality in the video below. (Gigerenzer is a German psychologist who has studied the use of bounded rationality and heuristics in decision making.)
Sometimes decision-makers use satisficers, to obtain a satisfactory solution rather than an optimal one. The term, “satisficing,” a combination of ‘satisfy and suffice,’ was introduced by Simon in 1956. He coined the term “satisficing”, which denotes the situation where people seek solutions or accept choices or judgments that are “good enough” for their purposes, but could be optimized.
Simon proposed bounded rationality as an alternative basis for the mathematical modeling of decision-making, as used in conventional economics and political science. It complements “rationality as optimization”, which views decision-making as a fully rational process of finding an optimal choice given the information available. The ideas of “bounded rationality and satisficing,” are now widely accepted, and its insights are fueling research throughout the social sciences.
Understanding bounded rationality and satisficing as two principles that are at play in decision-making and judgment in the homeland security ecosystem is important because in complex, fast-moving environments, practitioners of the security arts can be bounded to decisions that use both heuristics and biases. In my next Medium post, I’m going to be talking about the frequent heuristics and biases commonly used in the homeland security ecosystem.
Angi English has a Master’s in Security Studies from the Naval Postgraduate School’s Center for Homeland Defense and Security and a Master’s in Educational Psychology from Baylor University. She is a licensed Remote Unmanned Aerial Systems pilot. She is also a Licensed Professional Counselor and Licensed Marriage and Family Therapist in Texas. She lives in Austin.